According to media accounts, in his State of the Union address, President Obama is going to avoid dealing with our entitlement crisis. The question is: will Republicans?
That is setting up to be the key debate of the next several months.
There is one line of argument, articulated by Ramesh Ponnuru, that insists that for House Republicans to take on entitlement reform would be noble but politically suicidal. The reasoning is that (a) for the next two years, reform is impossible unless and until President Obama takes the lead on it; (b) Republicans have no mandate for reform even if they wanted to; and (c) every time they have tried to reform entitlements in the past (George W. Bush on Social Security and Newt Gingrich on Medicare), they have paid a high political price.
The more responsible approach would be to champion cuts in discretionary spending and continue to insist on the repeal of ObamaCare. That would be entirely enough, this argument goes; to do more will require a Republican president willing to educate the nation on the entitlement crisis and to do something about it.
The counterargument is that we are in a new and different moment when it comes to entitlement reform. Due to the financial crisis of 2008 and the spending habits of President Obama and the 111th Congress, what was a serious problem has become an acute one. In the past, the deficit and debt were manageable; now, every serious person who has studied this matter concedes, the situation is unsustainable. The public understands this in one way or another; and if they’re not yet ready to take on entitlement reforms, they are certainly educable in a way that has never been the case before.
The way to frame this argument, according to those who want to take on entitlement programs, is to simply state the reality of the situation: we can act now, in a relatively incremental and responsible way, in order to avoid the painful austerity measures that are occurring in Europe and elsewhere. Or we can delay action and, at some point not far into the future, be unable to avoid cuts that will cause a great deal of social unrest.
So we’re clear, the entitlement that really matters is Medicare. “The fact is,” my Ethics and Public Policy Center colleague Yuval Levin told Michael Gerson, “Medicare is going to crush the government, and if Republicans leave it unreformed then the debt picture is very, very ugly. They might never — literally never — show the budget reaching balance. Not in the 10-year window and not if they take their graphs out a hundred years. Obama could probably show balance just past the budget window in the middle of the next decade because of the massive Medicare cuts he proposes, even if in practice they will never actually happen.”
To get a sense of what we’re talking about, Veronique de Rugy has put together a very useful chart that can be found here.
It makes the point that cutting discretionary spending only makes a small difference in the overall budget picture. She lays out the difference between the Republican Study Committee plan, which cuts $2 trillion over 10 years and is therefore a good deal more aggressive than the House Republican leadership proposal, and where spending would be without those cuts over the next 10 years. As you will see, it’s a small difference. Spending keeps growing rapidly either way. Without entitlement reform, then, this is about as much as we could reasonably do — and it just isn’t that much.
In other words, if Republicans don’t take on Medicare, their credibility as a party of fiscal responsibility and limited government will be shattered. The math guarantees it. The GOP, having made the 2010 election largely (though not exclusively) a referendum on the deficit and the debt, will be viewed as fraudulent.
Compounding the problem is the fact that, as Gerson explains, if Republicans don’t touch Medicare, their budget approach — on paper, at least — will have less long-term debt reduction than Obama’s, both because Obama supports tax increases and he uses a slew of budget gimmicks to make his health-care plan appear to be far more affordable than it really is.
It’s a pretty good bet that the president will advance the same kind of gimmicks in his 2012 budget. If so, then unless Republicans are willing to champion Medicare reform (meaning changing it from a defined benefit program to a defined contribution program), Obama will be able to position himself as a budget hawk, at least compared to the GOP. This could have devastating political effects, including dispiriting the Republican base and the Tea Party movement. Having just elected Republicans in large measure to stop the financial hemorrhage and to restore fiscal balance, voters will not react well when they are told, in so many words, “Never Mind.”
So count me as one who believes Republicans need to embrace entitlement reform in general, and Medicare reforms in particular, because not doing so is irresponsible. It means willfully avoiding what everyone knows needs to be done in the hope that at some future, as-yet-to-be-determined date, a better and easier moment will arrive.
Sometime a political party needs to comfort itself with the axiom that good policy makes good politics. That isn’t always the case, certainly, but often it is. In any event, if the GOP avoids reforming Medicare, there is no way any Republican lawmaker, when pressed by reporters on fiscal matters, can make a plausible argument that their actions are remotely consistent with their stated philosophy.
They will hem and haw and duck and dodge and try to change the subject — and they will emerge as counterfeit, deceptive, and unserious. Here it’s worth recalling the words of the columnist Walter Lippmann, who wrote:
With exceptions so rare that they are regarded as miracles and freaks of nature, successful democratic politicians are insecure and intimidated men. They advance politically only as they placate, appease, bribe, seduce, bamboozle, or otherwise manage to manipulate the demanding and threatening elements in their constituencies. The decisive consideration is not whether the proposition is good but whether it is popular — not whether it will work well and prove itself but whether the active talking constituents like it immediately.
Perhaps I’m asking GOP lawmakers to prove themselves to be miracles and freaks of nature. But if I am right in my analysis, that is what is called for. It would mean Republicans have an enormous public-education campaign ahead of them. They will have to explain why their policies are the most responsible and humane. They will need to articulate the case not simply for entitlement reform but also for limited government. And they will need to explain, in a compelling and accessible way, why limited government is crucial to civic character.
None of this is easy — but lawmakers weren’t elected to make easy decisions. They were elected to make the right ones. And reforming Medicare is, in our time, the right decision.
Let’s get on with it.